Senate embraces Internet taxes

Full story - http://news.cnet.com/8301-13578_3-57575926-38/senate-embraces-internet-taxes/

 

There has recently been a media outcry at certain businesses that have managed to avoid tax in general in this country, so if there are companies not paying the UK equivalent of purchase tax, VAT, by selling on line, then how are they avoiding it?
As far as I am aware VAT is paid on every UK purchase where VAT is applicable, on line or not. (VAT is value added tax which replaced purchase tax some years ago)

Nev.

 

In the U.S.A. an internet order is only considered to be taxable if the retailer has a physical presence within the state that the purchaser lives. Take tigerdirect.com as an example; When I lived in Florida I had to pay sales tax when making a purchase from them as they have a physical outlet store in Florida. In Wyoming they do not have any such physical presence so I do not have to pay sales tax on an order. The way I understand the reasoning of this is that unless the retailer has a physical presence within the state they have no liability to the state as to taxes. I enjoy not having to pay taxes on such orders but realistically have to admit that I really believe that sales tax should be paid on any such orders according to the sales tax percentage where the purchaser lives and that such taxes should be paid to the city and state of the purchaser just as if they went to a local store.

I DO see some issues... The money and paperwork that will be involved will be off the charts. It will probably cost more to manage such a thing than will be brought in by the taxes.